What Assets are Included in an Estate and Which are not?
An estate consists of the assets you own at the time of your death or disability. Assets can range from a house or other real estate to personal possessions, such as jewelry and books. Most assets will be included in a person’s estate. However, some assets are considered probate assets, while others are non-probate assets. Probate is the process after a person passes or becomes disabled; their assets are put on hold until the will is validated, any remaining debt is paid off, and the beneficiaries of the will are identified. Probate can be a long and stressful process, especially after such a difficult time. Non-probate assets avoid this long, costly process and pass directly to a decedent’s heirs. For example, property that is held in joint tenancy or as tenants by the entirety, is considered a non-probate asset. Additionally, properties held in trusts, retirement accounts, life insurance accounts with beneficiaries that are not the decedent, and bank or brokerage accounts held in joint tenancy or with payable on death or transfer on death beneficiaries, are all considered non-probate assets.
Does a Will Avoid Probate?
The short answer is no, a will does not avoid probate. If a person passes with a will, then probate is required to implement the provisions of that will. However, probate can also happen if there is no will. In law, we refer to this situation as dying “intestate.” Dying intestate delays distribution of your assets and forces the state in which you live to decide who gets what. This is unfortunate because you may not like your state’s plan. Additionally, if the estate does not fall into the category of either disposition without administration or summary administration, probate will probably be required. Furthermore, in Florida, even if there is a will, the court may have to make sure the will is still valid and does not conflict with the law.
How do you Avoid Probate?
As mentioned above, probate can be extremely stressful. So, if you can take measures to avoid probate, why wouldn’t you? Avoiding probate can be done by not actually owning any property at all, but rather, letting a living trust own the property. The trustee of the trust will then “own” the property that is held by the trust, meaning the trustee can control the assets in the trust as if they owned them.
Because trusts tend to avoid probate, beneficiaries may be able to receive the assets from the trust far faster than if they were in a will. Additionally, some trusts help avoid estate taxes and reduce other costs, such as court fees. In Florida, there are different types of trusts, revocable and irrevocable trusts. Essentially, revocable trusts can be changed at any time, and irrevocable trusts cannot be changed after its enactment.